8 Reasons Why E-Commerce Businesses Fail
Experts predict that 95% of all purchases will be made through e-commerce platforms by the year 2040. But despite the convenience they offer customers, 80% of all e-commerce businesses fail.
So what are they doing wrong that the few successful ones aren’t?
I’ve rounded up some of the common reasons why most e-commerce businesses struggle to find buyers and keep afloat.
There Isn’t Any Real Investment
You can set up an online store with a few hundred dollars, but that doesn’t mean that’s all the investment your business is going to need. A new online store will require periodic investments and significant labor.
Some business owners don’t invest adequately in their online stores. The fact is that starting an online shop is like introducing a new business location to your repertoire. It’ll require just much time, effort, and money to set up and get off the ground as a new office or shop would.
You can’t just build a site and expect buyers to come visiting. Advertising, marketing, website design, and user experience will play an important role in getting people interested in browsing your site and placing their orders.
It’s necessary for online retailers to be realistic about their e-commerce investment and treat it like a bona fide business function so they can get the most out of it.
Cash Flow Problems At The Onset
Building a snazzy website with e-Commerce functionality can get expensive, fast. You’ll have to work with developers, graphic designers, content creators, SEO experts, and marketing specialists. All of that can pile up fast.
Add to the fact that customers won’t start flowing in until a few days or months later, and we have a problem at our hands.
E-commerce businesses need to spread their expenses out to ensure that all their payments aren’t due at the same time. Some wholesale retailers offer their clients monthly or quarterly terms to pay for inventory. It’s also advisable to reinvest or spend taking the actual revenue into account instead of projected sales.
There’s No Marketing Plan
What’s your Unique Selling Point? Have you carried out a Situation Analysis? How long will it take you to achieve your business goals?
A marketing plan can help you answer these and other such questions. Unfortunately, I’ve found that many business owners don’t have the plan or the answers.
E-commerce businesses need to map out their marketing strategy in detail. Take the time to plan, set up, and execute your processes. It’s the internet, it’s not going anywhere, but your business might if you don’t strategize properly from the get-go.
The Website Doesn’t Have An SEO Strategy
Search engine optimization (SEO) should be a big part of any e-commerce business’s marketing plan. By optimizing your Shopify website for Google, you move to the top of search engine results whenever anyone looks up keywords related to your business or the products you offer.
22% of product searches that US consumers carry out begin on Google, so your search engine rank affects sales immensely.
SEO leads organic traffic to your website and enables you to improve your sales. If your website ranks low in search engine results, it decreases your target customers’ likelihood of finding your store.
Bad Website Design
Modern e-commerce businesses need highly functional websites that have a short loading time and great search options and are adaptive to mobile devices.
Using Shopify, you have access to free and premium templates that have been created by some of the top website designers. Whether you’re a skilled designer or a beginner, the platform enables you to create a website that exactly matches the one in your head.
Poor Product Images
Another reason for low online sales is poor photography. Your product photography is the only way buyers can inspect the goods you have for sale. If you don’t offer potential customers the strong visual representation they need to understand, want, and buy your products, you lose out on sales.
A good rule of thumb while judging product photography is to use big-brand online retailers as the standard. If your product photography isn’t as focused, clean, and clear as the pictures you’d find on Shopify websites like Kylie Cosmetics or Spigen, it may be time to get professional help.
Lack Of Calls To Action
Calls to Action (CTAs) are the next steps you offer visitors on your website. CTAs usually include direct links to sales, such as instructing a visitor to click a button to make a purchase. They can also be more indirect—for instance, a CTA can request potential clients to get in touch and immediately mention the company’s number underneath.
For CTAs to be effective, they need to be obvious and follow any marketing messages on your website. If you want a visitor to add items to their cart, add a big button that stands out. If you want a visitor to call you and request a quote, mention your number in bold immediately after the CTA.
Without effective CTAs, potential customers won’t know the next steps to take. You have to make the buying process as streamlined and clear to your clients as you can. The greater the convenience you offer clients, the greater their chances of buying from you.
No Promotions Or Free Shipping
New businesses need to offer customers reasons to buy from them. Even taking small percentages of the selling price off your products can lead to big earnings. Some websites always have a 10% or 15% sale going on since they’ve set their product price 10% or 15% higher. Make these promotions extremely visible. It’s a great way of introducing urgency into the buying process.
In the same vein, new businesses that offer free or low-cost shipping to customers will have a greater chance of increasing their sales. No customer wants to pay $20 in shipping for a product that costs them $30. Offer free shipping on orders above a certain price and the lowest-cost shipping possible on all others.
Ready To Build Your Online Business?
Even before the COVID-19 pandemic, many businesses had shifted to offering their products and services online. However, it’s almost impossible in a post-pandemic world for a company to survive without having a strong online presence. People rely on e-commerce businesses not only for luxuries but also for basic necessities such as groceries. There’s never been a better time for e-commerce.
Whether you’re planning on adding a website to supplement your brick-and-mortar store or shifting your business online, Shopify’s built-in design features enable you to make the most of your e-commerce effort.